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Should companies refuse to hire unemployed candidates?

People who aren’t working shouldn’t be thought of as ‘damaged goods’

Aug 18, 2014

By Brian Kreissl

Years ago, conventional wisdom dictated that it was usually better to hire candidates who were currently employed than those who were out of work. While a lot of employers still feel that way, many have begun to recognize that unemployed candidates can often be great hires — sometimes even better than candidates who are employed elsewhere.

People who were out of work were traditionally thought to be “damaged goods.” Even where a candidate had lost her job due to downsizing through no fault of her own, the idea was there must have been something wrong with that person. Otherwise, wouldn't her former employer have chosen someone else to let go instead, or have tried to find a place for her?

There is definitely some logic in that type of thinking. If an employee was a star performer, wouldn’t her employer have moved heaven and earth to retain that individual even after her job was eliminated?

While organizations don’t always have the luxury of being able to create new positions for employees they want to retain, they’re often able to redeploy and retain those people in some capacity if they really want to keep them.

No doubt, many employers over the years subtly or subconsciously overlooked candidates who weren’t currently working. In many ways, it’s just human nature to prefer someone who is still working.

Formal policies against hiring the unemployed

Over the last few years, some employers — mainly in the United States — adopted formal policies against hiring unemployed candidates. A few even began including a statement in their job postings to the effect that unemployed candidates need not apply.

While this kind of thinking may be understandable to a certain extent, I would argue that it’s mean-spirited, wrong-headed and even counterproductive in the long-run. It could also be considered downright discriminatory in some situations.

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While it may work in the depths of a recession, artificially narrowing the pool of candidates probably won’t work in a tight labour market. Such a move must also be damaging to an organization’s employer brand because it smacks of elitism and could be seen as kicking people when they’re down.

It may end up even having a negative impact on the company in the product or service market. People have long memories and will often boycott organizations that treated them poorly in the past. And news of negative treatment by a prospective employer can go viral these days within a matter of hours.

Another factor to consider is that a lot of good people lost their jobs through the last few recessions, and because of that many employers are beginning to understand that unemployed candidates shouldn't be thought of as pariahs. The sheer scale of layoffs often meant that even top performers couldn’t escape layoffs. Some even voluntarily took packages believing they would easily find work elsewhere.

Refusing to hire unemployed candidates is also likely to make it even harder for those folks to land a job and cause them to join the ranks of the long-term unemployed. It’s a vicious circle – once someone has been out of work for six months or longer, it becomes even harder to find work.

Advantages to hiring unemployed candidates

I recently read an article that argued unemployed candidates often take time to refresh their skills and keep up to date with what’s going on in the industry. They’re also frequently more enthusiastic about starting a new job and are more loyal to their new employer when they finally do get hired.

It’s also true that an individual who is employed elsewhere and is ready to jump ship may not be the most loyal or best performing employee. And there are certain advantages to hiring someone who isn’t currently working – namely that the person is generally available to start right away and may be willing to work for slightly less than someone who is employed elsewhere.

I even believe the tables may be turning to some extent and a few employers are starting to be suspicious of jobseekers who are already working. I believe there could be some negativity surrounding candidates who are actively “pounding the pavement” looking for work.

There’s also the feeling – particularly when times are tough – that people who are working are lucky to have a job and there may be a preference for giving someone who’s unemployed a chance.